President-elect Donald Trump is determined that America exploit its vast shale oil and gas reserves. The result will be an energy boom with global implications, some especially problematic for Canada.

Hydraulic fracking has already had an immense impact on America’s economy. The Brookings Institution reports that, from 2007 to 2013, energy consumers gained US$74 billion a year in lower energy costs brought by increased fracking. According to the National Bureau of Economic Research, between 2012 and 2014, energy development and lower energy costs generated US$3.5 trillion in GDP and 4.6 million new jobs. This despite a collapse in oil and gas prices.

The appointment of pro-fossil-fuel climate skeptics to key positions in the new administration sent a clear signal to the stock markets: Energy will be a key driver of jobs, economic growth and national security. Canada should draw two lessons from this looming tidal shift, both of which lead to the same policy conclusion.

The first lesson is that countries blessed with vast natural resources profit enormously when they have the common sense and resolve to develop them. That requires making the economy and the welfare of their citizens a priority. It does not have to mean sacrificing safety or environmental protection. To the contrary, governments should rely on independent regulatory recommendations based on science and economics. But it does imply abandoning unsound policies grounded in ideology or failed political promises.

If political leaders explain what is at stake, a pro-development approach can marry appealing politics with good policy, which is why virtually every resource-rich country has taken that path, including the U.K., Australia and Norway. For the U.S., it presents as a dramatic reversal of President Obama’s focus on climate change as humanity’s existential threat. But even under his watch, so much new drilling made the U.S. the biggest producer of oil and gas in the world. This raises a pressing question: Why is the Liberal government prepared to undermine Canada’s economy and jeopardize our standard of living on the altar of “moral leadership” on global warming when other countries are not doing their part and couldn’t care less what we do, and our sacrifice won’t make any discernible difference to global temperatures?

‘Have not’ provinces that refuse to develop their natural resources … should have their equalization payments reduced accordingly

The second lesson we must learn from this new American energy era is the need for a pragmatic response to an impending economic challenge. With the U.S. optimizing shale exploitation, our only customer for oil and gas will need less Canadian energy and even now is aggressively pursuing markets for exports of its own liquified natural gas and crude oil. In the first six months of 2016, the U.S. exported nearly 50 billion cubic feet of LNG, while B.C. continues waiting anxiously for its first LNG project. As we sell Americans our oil at discounts to the international price amounting to billions of dollars every year, they sell American oil at higher prices abroad. In effect, we are subsidizing their exports. As if that isn’t bad enough, expensive, uneconomic green electricity is rendering Canadian industry less competitive every day.

All this should be a serious concern for our prime minister. Unfortunately, he is in denial. He characterized Trump’s policies as an “extraordinary opportunity” for Canada to attract investors to opportunities 10 to 20 years from now. To be charitable, that sounds like the triumph of hope over experience, given the negative capital reaction to the alternative energy catastrophe in Ontario and anti-growth tax and regulatory policies in Alberta.

Moreover, Trudeau opposed Northern Gateway after a positive regulatory review, ordered the closure of cheap-energy coal-powered electric plants by 2030, and imposed a moratorium on crude-oil tanker traffic off B.C.’s North Coast. He magnified the scope of regulatory reviews, made them longer, and politicized the process. Last month, he banned offshore oil and gas licensing in the Arctic, which Bob McLeod, premier of the Northwest Territories, says holds seven billion barrels of oil and 92 trillion cubic feet of natural gas. Meanwhile, Russia is drilling away in its half of the Arctic.

At the same time that the shale revolution is helping the U.S. win the energy war with OPEC, four Canadian provinces have imposed a moratorium on fracking. So here is a recommendation guaranteed to provoke outrage. “Have not” provinces that refuse to develop their natural resources, preferring to leave energy development to other parts of the country to worry about, should have their equalization payments reduced accordingly. We simply can no longer afford the luxury of feel-good but costly and baseless decision-making.

It is impossible to keep count of the billions our governments are spending and forgoing in these much-vaunted green missions, which offer benefits no one can quantify.

While America roars ahead, our government nurtures a deluded sense of moral superiority. In spite of massive deficits, it is confounded by slow growth and confronted with increasingly unaffordable health-care costs. It’s time to wake up to the world as it actually is. Reality bites.

Joe Oliver is the former federal minister of natural resources and of finance and is currently a candidate for nomination of the Progressive Conservative Party of Ontario in York Centre.

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